Home Equity 7 Ways to Use it
Home Equity 7 Ways to Use it
Full Video Transcript Below
Home Equity Can Be a Game Changer in 7 Ways
Alice Lema: [00:00:00] Well, Hey, real estate fans. Welcome back to the weekly podcast. I'm Alice Lema. I'm a real estate broker in Southern Oregon with John L Scott real estate. And today on our podcast, we're going to talk about seven ways your home equity can be a game changer when you sell. This very exciting topic. And we're starting to have more market activity with people selling and buying because we have a few more houses for sale now and the people selling are more comfortable buying.
So we're going to talk about the seven ways that the equity in your home can be a game changer this real estate season. Okay, first of all, let's talk about what home equity is. Home equity is the difference between the value of your home right now and the amount you still owe on your mortgage. And if you paid your house off, then it's 100 percent equity.
So it represents the paid off portion and a lot of folks right now, especially since the last few years, they have a lot of equity. The value of their, their properties have gone up a lot. So it's really just a [00:01:00] simple math equation. So I've got seven ideas of what you can do with that equity.
The first is you can take that equity and use it when you sell your home to pay cash for the next purchase. And a lot of downsizers do this. But you can do it at any age for any reason. You're just going to be getting a smaller smaller property because most of us don't have our properties paid off. But if you have it paid off, then you can use all of that and pay cash. So that's number one.
Number two, make a bigger down payment and get a mortgage. That makes your dollar go farther and you could get a bigger property. And maybe have the payment be about what it was when you had a lower interest rate. Cause we do have a higher interest rate environment now, but the percentages have come down from their highs of last year. So that's number two. Make a larger down payment.
Number three, buy a second home or a vacation property. Those markets in a lot of parts of the United [00:02:00] States are really soft right now. The vacation market and the second home market really thrive and are more popular when the economy is good for everybody. So right now our economy is good for some, not for others.The stress is showing a little bit, not only in the vacation market and second home market, but also the commercial market. But that's a different podcast. But number three, think about getting a second home or vacation property, because the prices are a little bit soft right now in a lot of our resort, you know, destination lifestyle destination areas.
Number four, and my personal favorite buy an investment property. Who has enough passive income in their life, right? And if you're older or looking at your older future this could be a great time to get into an investment property, especially if it is the down payment that you have, makes it pencil. So you have more profit. That could just be great. So think about [00:03:00] buying an investment property. That's our number four idea.
Number five, use the money to partner with your kids your adult kids or other trusted close people in your life that you love and trust. Partner with these people in a larger multi generational purchase. So these are usually on acreage or they're at least bigger houses, bigger lots, some of them have pools but that is an excellent way to take this giant amount of equity that you have in the property you're living in now. When you sell it and put it into a multi generational lifestyle. We have a lot of folks doing that. It's a great, great strategy.
Number six, give some of the money as a down payment to a well deserving person in your life that you love and trust. And I have some other videos, if you're going to go down this path of partnering or gifting, some ideas of, of criteria to have in your mind [00:04:00] when you're picking this person. But it could also just be one of your adult children, or in some cases we have adult children gifting these down payments to their elderly parents who are not in a position to purchase something. So that's our number six is considered gifting a down payment.
Number seven, do nothing, do nothing. Don't sell. Just enjoy that you rock, that you made some great decisions and you're sitting on a pile of cash or at least a pile of value. So that's our, our seven ideas. For using the home equity that you have when you sell a property right now.
Please click to subscribe on this channel. If you enjoyed the information, feel free to send it to your friends and family. And also give me a call or text. I want to be your agent. I am a great listing agent, great buyers agent, great with investments work with a lot of rural property, waterfront. [00:05:00] Also multi generational purchases, partnerships, investments. So give me a call. Give me a text. My number is 541-301-7980. I want to work for you, but I also want you to be an educated consumer. And that's why we do these podcasts every week. So have a beautiful rest of your weekend and we'll see you next time. Bye now.